Equity-release advances hit £200m for quarter
New equity-release advances grew by 12 per cent between the second and third quarters of 2011, according to trade body Safe Home Income Plans.
Ship members advanced £184.9m in the second quarter of this year, increasing to £206.2m in the third quarter.
The number of equity-release customers grew by over 10 per cent from 3,710 in the second quarter to 4,148 in the third quarter.
Drawdown lifetime mortgages remained the most popular in the third quarter, accounting for 61 per cent of market sales. This is followed by lump sum lifetime mortgages at 36 per cent, with home-reversion schemes accounting for 2 per cent of all sales in the third quarter.
The average amount released on an equity-release product remained stable in the third quarter at £49,703 but this figure has risen by 6 per cent over the last year from £46,754 in the third quarter of 2010.
Ship director general Andrea Rozario says: “We feel that breaking the psychologically important £200m barrier for new advances in the third quarter is fantastic news for an industry that is recognised to have huge latent demand.” Equity Release Advice managing partner Stuart Wilson believes the increase in total advances is down to the fact that Halifax decided to withdraw its retirement home plan, which was marketed as an alternative to equity release.
He says: “Halifax allowed mortgage brokers to sell it without any equity-release qualifications. They pulled it in August and because it was not a Ship provider, none of the lending it was doing showed up on Ship’s figures and I believe they were doing quite a substantial amount of lending on it.”